11.2 Linking compliance and risk management

Question 1

What is the link between risk management and compliance management?

Answer 1

There are laws associated with risk management. Whenever there are laws, ther is compliance risk, associated with not complying with those laws.

Question 2

Give three examples of types of regulations relevant to risk management

Answer 2

• Company law and governance (e.g. CA 2006)
• Health and safety law (e.g. Health and Safety at Work Act 1974
• Environmental law (e.g. Environmental Protection Act 1990)
• Prudential regulation (e.g. the PRA)

Question 3

What is the goal of compliance management?

Answer 3

To ensure that all applicable laws are identified that the implications of these are assessed and understood.

Question 4

What are the main activities of compliance management?

Answer 4

Putting mechanisms into place to assess whether an organisation is compliant, and designing and implementing controls to maintain compliance.

Question 5

List three potential compliance risk events.

Answer 5

1 An organisation does not realise that a new law or regulation exists or applies to it.
2 There is a lack of certainty on how to comply with a law or regulation
3 An organisation makes a conscious decision not to comply with a law.
4 Staff members within the organisation cause a breach of regulation.
5 Complexities and conflicting priorities make it hard to comply with all regulations.